News and Insights

Britain is still a long way from a completely contactless future

08.09.2017

London, UK - It has been ten years since the first contactless payment card was introduced to this country. This represented the most significant improvement for buyers and sellers as it made buying goods and services much faster. It also saved them millions in hours. It was a profound change for shoppers and many credit card companies have invested more than £60 billion to create contactless cards and devices. Today, 51 per cent of transactions up to the £30 limit are made using this technology.

However, in Britain there is still considerable anxiety over replacing cash completely with contactless payments. In 2005, cash and notes consisted of 64 per cent of all British payments, but this decreased to 45 per cent by 2015. In 2025, 25 per cent of all transactions are expected to be contactless. Earlier this year, South Korea issued a trial to see how many of its citizens would prefer to use contactless payments. Yet in the UK, many people are still reluctant about a cashless future. Over three-quarters of Brits are concerned about using contactless payments and mobile phone payments. 50 per cent were anxious about fraud, but data security incidents and theft also featured highly. 25 per cent of shoppers did not use contactless at all. It seems like this country will not be experiencing a totally contactless future soon.

Nonetheless, the growth of contactless payments in Britain has been remarkable. 60 per cent of citizens opt to pay with their contactless cards and devices when the chance is available. Usage is expected to rise by 317 per cent by 2021. 90 per cent of transactions in fast food restaurants and pubs and bars are now made using contactless. Meanwhile, in supermarkets and convenience stores, 75 per cent of purchases totalling £30 in value are made using “touch and go”.

Since 2016, clothing stores have experienced a 321 per cent rise in “touch and go” payments, followed by car parking (137 per cent), department stores (126 per cent), supermarkets (124 per cent) and gift shops (105 per cent). Generally, the UK has experienced a record 34 per cent of contactless card payments since June 2017. Britain is now the leading country in Europe to use contactless devices to make transactions, beating Poland, France, Finland and Spain.

It is incredible to witness how much progress has been made with contactless payments in this country since its introduction a decade ago. The UK’s first integrated contactless payment car key was implemented this year through the DS Connected Chic. You can now use standard car keys to make contactless payments of purchases worth £30. This technology is now exclusive to British customers. This new method enables consumers to monitor their spending, increase their balance and take control to block or end the contactless payment element using the unique bPay app available on Apple or Android devices. Other features include 17-inch alloy wheels, automatic air-conditioning, eMyWay satellite navigation and MirrorLink and Apple CarPlay smartphone connectivity.

In recent years, there has been an expansion in mobile contactless transactions. 25 per cent of Brits have used a smart phone or smart watch to make a contactless payment. ApplePay has been welcomed by many consumers who view it as a safer method of payment.

This trend is particularly common among younger generations, unsurprisingly. Shoppers aged 18-35 are the most likely to make contactless payments. Over 65s tend to be more cautious with contactless payments. 55 per cent of this age bracket have made “touch and go” payments at some stage in their lives, which represents a 3 per cent increase since 2016.

When presented with the opportunity to go completely cashless, many British citizens are very hesitant about this option. Only one in three consumers across Europe would use contactless payments completely if they were provided with the opportunity to do so. Here in the UK, only 20 per cent of people would go completely cashless, the lowest in the entire continent. That stands in contrast to Italy, Turkey and Poland where 40 per cent of people are willing to cashless entirely.

Understandably, the most welcome feature of contactless payments would be a reduced risk of fraud. There have been many warnings raised in the past about issues with “touch and go” payments. For example, cardholders are at risk of fraudulent payments being made even after they have cancelled cards which have been lost or stolen. One person discovered that even after they stopped their card, it was still being used for contactless payments nearly a year later.

Digital pick-pocketing is also on the rise, where thieves enter crowded areas with a mobile card reader. In theory, they can then key an amount into that terminal and hold it against victims’ pockets, debiting cash from their accounts without them realising.

RFID blocking wallets are one precaution consumers have been recommended to use to guard themselves against fraud. There are now 92 million contactless cards in the UK, but “touch and go” fraud only makes up 1 per cent of crime. Despite this, there are other measures customers can take to guard themselves. They can wrap their cards in tin foil as this can deflect the reader and shield the card. Metal card holders available from Amazon will also help. Many people fail to realise contactless is just as safe as chip and pin as you cannot make the same payment twice and cards must be held very close to a reader for it to be safe.

It seems that Britain is still a long way off before it embraces a completely contactless future. There is much anxiety about embracing this payment method in its entirety. Yet what many customers fail to realise is that contactless is a very safe payment method. If more accurate information was provided to people, they may be more willing to adopt contactless payments altogether. Banks and credit card companies can play a substantial part in raising awareness of its safety. Until they do, it seems like cash and chip and pin payments are here to stay.

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Matthew Snape is a journalist for Centus UK and specialises in topics relating to the EU and UK economy, politics and payments industry. Matthew is also in the middle of completing the National College for the Training of Journalists qualification.